Agency fees vs hidden HR costs: Why outsourcing recruitment pays off
In Malta’s tight labour market, the real question isn’t “Can HR handle it?” but “What’s the cost of not using specialists?”
In most Maltese boardrooms, recruitment is still treated as something the HR department “handles”. They post a vacancy, sift through CVs, sit through a few interviews – and on paper, it looks cheaper than paying an agency fee. But in a labour market where the best candidates are already working, already being courted, and often never touch a job board, that logic quietly caps a company’s growth.
The real comparison isn’t “agency vs HR”. It’s outsourcing a specialist function to experts for a fraction of a full-time salary, rather than asking a busy internal team to be strategists, headhunters, copywriters, interviewers, and negotiators on the side. A good recruitment agency brings reach, speed and market intelligence that most in-house teams simply don’t have the time or networks to build. The fee is visible; the cost of an unfilled role, a bad hire, or a missed opportunity is not.
Think of it this way: your HR people are already juggling payroll, attendance issues, disciplinaries, performance reviews, policies, wellness initiatives and a steady stream of “Have you got a minute?” conversations. Recruitment becomes another fire to put out. Vacancies stay open for months, managers “settle” for second best, and strong candidates lose interest after a clunky process.
An agency lives in a different rhythm. Their day is built around mapping talent, talking to candidates, understanding who might be open to move and what it would take. They work with active candidates and, crucially, passive ones – the people your job ad will never reach. They know which salary ranges are realistic, which skills are scarce, and how your employer brand is perceived in the market because they hear it unfiltered.
From a cost perspective, owners often compare agency fees with “free” in-house recruitment. But nothing about in-house is free. Add up the HR hours spent screening irrelevant CVs, the interviewing time of senior managers, the cost of advertising, the risk of probation failures and the impact on teams carrying vacancies. In many cases, a single failed hire costs more than an agency fee would have.
For SMEs in particular, it rarely makes sense to hire a full-time talent acquisition specialist. Outsourcing to an agency gives you that level of expertise on demand. You plug into a ready-made network, proven screening processes, and a team whose KPIs are directly tied to getting the right person into the proper role, fast.
Ultimately, using a recruitment agency is not an admission that HR isn’t doing its job. It’s a strategic choice to let HR focus on culture, retention and development, while specialists handle the hunt. In a small, competitive market like Malta, where the best people have options, that division of labour can be the difference between slowly filling seats and confidently building a team that moves the business forward.
If you’re rethinking how you hire, this is the moment to sense-check your approach. Talk to M Recruitment about how agency support can complement – not replace – your HR team and turn your following vacancy into an opportunity, not a risk. Find out more at mrecruitment.eu.
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